Calls have grown for mandatory reporting of ethnicity pay gaps within UK firms, following the publication of the first-ever Office for National Statistics (ONS) figures on the subject. [1] In the data, unveiled on 9 July, the ONS reveals that:
- workers of Bangladeshi heritage earn, on average, 20.2% less than white-British staff;
- last year, the median pay for white-British workers was £12.03 an hour, compared to £9.60 for the Bangladeshi group and £10.00 for those of Pakistani heritage;
- ethnic Pakistanis and Bangladeshis also had the lowest employment rates, at 58.2% and 54.9% respectively;
- the Bangladeshi group had the lowest proportion of employees in the top quartile of median hourly pay, at 13.8%;
- black, African, Caribbean or black-British workers’ hourly pay was 9.2% less than that of their white-British counterparts, and
- in regional terms, the percentage difference in median hourly pay between people of a white ethnicity and all those who belong to ethnic minority groups is largest in London, at 21.7%.
While there was much more positive news for Chinese and Indian workers – who actually earned more than their white-British colleagues – the figures for other groups have intensified demands for mandatory ethnicity pay gap reporting.
For example, Ben Keighley – founder of recruitment firm Socially Recruited – described the ethnicity pay gap as “underreported” and “just as damaging to the economy” as the gender pay gap. [2] He noted: “There should be compulsory reporting of the ethnicity pay gap in the UK, as called for in Baroness McGregor-Smith’s Race in the Workplace report in 2017 [3] because we cannot address what we cannot monitor.”
Resolution Foundation policy analyst Kathleen Henehan said: “Black and ethnic minority workers have made huge strides over recent decades in terms of educational attainment and rising employment. But despite this, almost all BAME groups continue to face significant pay gaps, compared to white workers. What’s more, these pay penalties hold even after accounting for workers’ qualifications, experience and the types of jobs they do.
She added: “Having made significant progress on shining a light on gender pay gaps within firms though equal pay audits, the government should now extend this to look at pay gaps for BAME workers too.”
In March, News & Views reported on how voluntary efforts to disclose ethnicity pay gaps are gathering pace thanks to the INvolve pledge, which has attracted participation from firms such as KPMG, EY, Deloitte and Lloyds of London. But have we now reached a point where legislation is the only way forward?
The Institute of Leadership & Management head of research, policy and standards Kate Cooper says: “The new ONS figures are a tangible response to all the ‘what abouts’ that surfaced when the first gender pay gap statistics were published: What about other groups? What about disability? What about ethnicity? And it demonstrates that once you focus on the systemic disadvantages and inequalities that one underrepresented group faces, you are at the same time raising awareness of all the problems that affect other groups. And that’s very much what’s going on behind the data that the ONS has divulged.”
Cooper comments: “If we look at how mandatory reporting plays out in the context of the gender pay gap, it’s really interesting: the analysis doesn’t simply concern a binary split between male and female earnings. Rather, it examines a whole range of other factors that contribute to a much more rounded understanding of the gap – for example, retention rates for parents, wellbeing policies and other work-life balance provisions. In other words, holistic insights into the quality of people’s experience of being at work.
“So, should we mandate for ethnicity reporting in a similar way to how it currently works with gender? One can hardly say it’s not a good idea, because the more information you have, the more you are able to define where you’re starting from – and the better you will be able to measure progress. But we still haven’t seen what sort of sanctions are going to be applied to companies that have failed to disclose their gender pay gap statistics. So by all means, yes – let’s make ethnicity pay gap reporting mandatory. But let’s also think about what we’re going to do with all the organisations that don’t comply. What sort of consequences will they face?”
She notes: “One of the most exasperating aspects of the gender debate is the sheer amount of feeble excuses that some of the UK’s biggest organisations have advanced for why they underrepresent women at senior levels. A string of such excuses – for example, ‘there aren't that many women with the right credentials and depth of experience to sit on the board’ – were flagged up in the landmark Hampton-Alexander review. [4] But what’s interesting about the ethnicity debate is: can we seriously say that people from Bangladesh don’t want to be, say, pilots, in the way that some firms have claimed about women and their aspirations? No, of course we can’t.”
Cooper adds: “The ONS data on Chinese and Indian workers is fascinating: what is it that they are doing differently? What are the cultural factors behind that? What sort of experiences do those ethnic groups have of making their way in the UK? There are so many questions to explore, and so many ways of interrogating this type of data even further. So how could one not approve of and support any measure that would drive openness and transparency in this field? How could one oppose any initiative that would challenge organisations to genuinely broaden their talent pools and address inequalities, so they could say, with complete honesty, ‘We are an inclusive employer’?”
For further insights on the themes raised in this blog, check out the Institute’s resources on appreciating diversity